As the Financial Conduct Authority’s deadline for compliance with new rules to counter greenwashing, insurers are being warned that the rules apply to all products and services communications.

Financial services consulting firm, Hymans Robertson, is reminding insurers that the risk of greenwashing cannot be confined to a single business function or activity, as the 31st May deadline for compliance with the FCA's new rules approaches.

The FCA rule requires sustainability claims to be clear, fair, not misleading and consistent with the sustainability profile of the product or service. To comply, insurers will be responsible for ensuring that all their sustainability claims can be evidenced against these requirements.

Commenting on how insurers can manage their compliance to the new rules, Rebecca Macdonald, head of products, Hymans Robertson said: “The main thing to recognise about FCA’s anti-greenwashing rule is that it’s about improving transparency, which should in turn improve customer engagement. These are good things for the industry to focus on. However, it applies to all communications, including images, that relate to products and services. And because the risk of greenwashing isn’t limited to one point in a product or services’ lifecycle, it is inevitable that firms will find there is additional cost to ensure ongoing compliance.

“Greenwashing is high on the agenda of regulators in general and many insurers will find that they’re subject to anti-greenwashing rules from more than one regulator. The FCA has pointed out that they have worked with the Competition and Markets Authority and the Advertising Standards Authority to ensure consistency within the UK. The European Insurance and Occupational Pensions Authority has also opened a consultation on greenwashing, with the view to create a more effective and harmonised supervision of sustainability claims across European firms. This focus will no doubt be maintained, and insurers should look to take every possible step now to be ready.”

Hymans Robertson proposes the following steps for insurers looking to prepare for the new rules:

• Conduct a thorough review of customer facing materials to identify any sustainability claims
• Check that all claims are substantiated and all evidence is available
• Check that sustainability benefits are objectively measurable
• For thorough compliance consider obtaining an external review of customer materials
• Incorporate greenwashing risk into existing risk management frameworks.

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